adding surface (F) adds vertices, massing up subdivision surface
Unfortunately, using subdivision on a mesh like that one, wont usually work if you work off edges and vertices, blender doesn't like that.

start from the top and work to the base, that's the way I like to work, and it allows me to scale things better.
work off what you have though, perhaps don't subdivide, but use the cut tool in editor mode and smooth it yourself, to make it look more human.

also the dot is the center of the entire thing? if it's yellow and you've selected the mesh.

using F to make faces and subdivision aren't good friends!

( i'm not a pro, take what I say with a grain of salt, it might not work! )